Medical marijuana firms discussed using banned pesticides

“I think of it like this; I buy my food from little local markets, grow my own when I can and buy organic. I shop small and local avoiding big chain stores, mono crop corporate farm POISSON distribution centres otherwise know and Big Chain Grocery stores. Why would I want my cannabis grown by the same people that destroyed our food? Government is in it for a money grab just as LP’s and the “Green Rush” and its wall street pump and dump cannabis bubble. Time will tell I suspect there will be a market for Walmart weed with 1 pound of foam and plastic wrapping for a gram of pesticide laced GMO weed that causes disease and makes you numb.” J.W.

Contamination Scandals Send Big Pot’s Moral Argument Up In Smoke

And what exquisitely cruel timing with two image-bruising developments in the last two business days of 2016.

For many shareholders in particular, it was analogous to a much-anticipated bottle of high-end champagne turning out to be flat on New Year’s Eve.

Here’s what happened: it recently came to light that two federal government-approved ‘licensed producers (LPs) of medical marijuana have been caught by authorities selling tainted cannabis to medical patients.

It undermines the argument that Canada’s many small medical pot dispensaries should be legislated out of business.
This is a big deal.

Admittedly, nobody is suggesting that some nefarious corporate malfeasance has just been exposed. Hopefully, it just turns out to be instances of human error in both cases.

Nonetheless, it hurts the credibility of an industry that insists that it grows and sells the cleanest, safest, best-quality medicinal marijuana in the whole world.

It also undermines the argument that Canada’s many small medical pot dispensaries should be legislated out of business — all because their products aren’t grown under the watchful eye of Health Canada or even with its approval.

In fact, some LPs have even lobbied to have their main rivals shut down for selling cannabis that isn’t grown to pharmaceutical-grade standards.

Poster boys caught with their pants down

Canada’s well-financed medical marijuana LPs boast that they’re pioneering the very best industry standards in the world. Now this claim to fame has been besmirched.

It revealed that a controversial pesticide that’s banned in Canada had been found on an unspecified amount of Mettrum’s products.

The chemical in question is myclobutanil, which is known to emit hydrogen cyanide when smoked or heated in other ways. This comes on the heels of recent recall involving another banned pesticide, pyrethrin, which was found in some of Mettrum’s cannabis.

That’s problematic. After all, who buys cannabis for daily use to help manage a chronic health condition but doesn’t use it for at least five months?

In reality, many of the tainted products have surely been consumed already. And medical patients must now be left wondering if they’ve unwittingly ingested a health-compromising toxin.

Organigram isn’t saying what the offending chemical is. But it is reassuring its customers and shareholders that the contaminant “is not likely to cause any adverse health consequences.”

So it seems like Organigram’s customers might have less to worry about than medical patients who bought hydrogen-cyanide-laced cannabis from Mettrum.

Now that it has lost the PR high ground, it needs to try to win it back.

Hypocrisy of Big Pot?

In recent years, the federal government has favoured big, well-financed corporations to manage the legal roll-out of Canada’s medical marijuana industry. The catch is that they’re very tightly regulated.

Big Pot now consists of three dozen or so industrial-scale growers all across Canada. And they each benefit from many millions of dollars of private equity backing or big-dollar financing from the capital markets.

So, why exactly does Health Canada endorse Big Pot? It’s because the industry has committed to spending tens of millions of dollars on a science-driven approach to growing contamination-free cannabis to pharmaceutical-grade standards.

Big Pot’s sales pitch to win over medical patients at the expense of medical dispensaries goes something like the following:

You’d be crazy to buy your medical marijuana from dispensaries. Who knows where these little guys are getting their strains from? Well, actually, it’s probably mostly from organized crime. And it’s likely laced with excessive pesticide residues, which can even include illegal ones.

This isn’t the best way to manage your cancer pain. Instead, you need pharmaceutical-grade marijuana, which is what our industry specializes in. And that’s why we have the support of the federal government, unlike those dispensaries.

Now that seems like a very compelling argument — assuming it’s true. But such criticisms don’t really apply to many reputable dispensaries.

So Big Pot’s moral grandstanding just went up in smoke. Now that it has lost the PR high ground, it needs to try to win it back.

In the rush to scale-up in a hurry for a looming recreational market, licensed producers must remember not to sacrifice quality in favour of quantity. In other words, there should be no shortcuts, especially ones that
involve the illicit use of banned pesticides.

There should also be enough technological screening and scrutinizing to ensure that other contaminants don’t also tarnish the end products. After all, isn’t that what pharmaceutical-grade really means?

But this scandal isn’t likely to unravel the deal. Certainly, it won’t impact the reasons that made this acquisition strategically smart for Canopy.

And Organigram should bounce back soon enough. The company’s modus operandi remains fundamentally intact; organic cannabis seems to be the best option for medical patients with compromised immune systems.

However, Organigram now needs to pay much more attention to quality control if it’s to preserve its reputation and build its brand.

It also needs to overhaul its PR campaign — which has been dismal in the immediate aftermath of a scandal that strikes at the very heart of its much-hyped business model.

The whole industry now will be under heightened scrutiny. But it will benefit from this. After all, if Canada wants to be the standard-bearer for the world’s best-quality, contaminant-free, pharmaceutical-grade cannabis, it needs to set the highest standards.

Now’s the time to walk the talk.

In fact, Organigram, Mettrum and their competitors should take note that the whole world is watching.

Over the next decade, Canada will serve as a template for other progressive-minded nations that want to decriminalize medicinal cannabis.

So LPs need to get it right. And not just most of the time. But all of the time.

Medical marijuana firms discussed using banned pesticides

Two years before Canada’s medical-marijuana sector became embroiled in a tainted cannabis scare, the trade organization representing the majority of commercial growers explored using banned pesticides on their products, according to newly obtained documents.

Meeting minutes and confidential e-mails sent in 2015 to more than a dozen companies on the subject, show that some industry members supported using prohibited chemicals such as myclobutanil – a pesticide that produces hydrogen cyanide when combusted and can lead to serious health problems.

Though the application for approval was never carried out, myclobutanil is now at the centre of a controversy over patient safety in the sector after two companies – Mettrum Ltd. and OrganiGram Inc. – were found selling products contaminated with the banned substance.

The discovery has led to the largest recalls the young industry has seen, resulting in the destruction of more than $1-million of tainted product and it has spawned two proposed class action lawsuits on behalf of patients who unknowingly ingested the chemical.

It has also raised questions about Health Canada’s oversight of the new industry.

The industry was created three years ago by the federal government to provide safe, pharmaceutical-quality products that could be trusted by doctors and patients, including those with compromised immune systems.

While myclobutanil is known as a prohibited, potentially dangerous chemical when inhaled, the documents from 2015 show the industry contemplated using it nonetheless.

According to minutes from a Canadian Medical Cannabis Industry Association (CMCIA) conference call held in February that year, two federally licensed medical marijuana growers, Tilray and MedReleaf, were in favour of seeking federal approval for the right to use myclobutanil and were seeking broader industry support for the idea.

A third company, Thunderbird Medical, wanted permission to use the chemicals AzaMax and Spinosad, which were prohibited under federal rules.

It is not known from the meeting minutes which licensed producers, or LPs, supported the proposal and which opposed the idea. However, a Jan. 28 e-mail obtained by The Globe and Mail shows that one member of the industry group, a company called MedCannAccess, which is now owned by Canopy Growth Corp., wanted to “get input from all LPs” before proceeding.

The documents suggest the desire to use such chemicals in Canada’s medical marijuana sector was greater than originally believed. In 2015, the CMCIA represented the majority of the roughly two dozen medical marijuana companies licensed at the time. The group, which has since changed its name to Cannabis Canada Association, hired Ottawa lobbying firm Capital Hill Group to explore the pesticide approvals with the federal government.

Asked about those efforts this week, Tilray executive Philippe Lucas, who sat on the committee that organized the conference call, said he could not remember spearheading the idea. In the minutes from that meeting, Mr. Lucas is listed as the person who would “draft the letter” asking to use myclobutanil.

Reached by phone, Mr. Lucas requested The Globe send its questions via e-mail. A Tilray spokesman then followed up, saying that many licensed producers in 2015 were interested in seeking regulatory approval for using myclobutanil, which is typically used to fight costly outbreaks of powdery mildew that can devastate cannabis crops.